Dear customer, in relation to termination of employment, for Terminating an enterprise agreement an employer and its employees may agree to terminate an enterprise agreement at any time while it is in operation: s 219.

As with making or varying an agreement, an employer may request the employees covered by an enterprise agreement to approve its termination by way of vote. Before any such vote can be conducted, the employer must first (s 220):

•take all reasonable steps to notify the employees of the time and place at which the vote will occur and the voting method to be used; and

•give the employees a reasonable opportunity to decide whether to approve the proposed termination.

The termination is agreed to when a majority of employees who cast a valid vote approve the termination. A person covered by the enterprise agreement must then apply to the FWC for approval of the termination within 14 days after it has been agreed to; or, if the FWC considers it fair in the circumstances to extend that period, within such further period as the FWC allows.

The application must be in the prescribed form (Form F24), and must be accompanied by a statutory declaration made by an officer or authorised employee of the applicant setting out the basis upon which the FWC can be satisfied that the requirements of s 223 of the FW Act have been met (Form F24A).

The FWC must approve the termination of the agreement if it is satisfied that (s 223):

•before requesting the employees to approve the proposed termination, the employer took all reasonable steps to notify the employees covered by the enterprise agreement of the time and place at which the vote would occur and the voting method that would be used, and gave the employees a reasonable opportunity to decide whether they wanted to approve the proposed termination

•the termination was agreed to by a majority of the employees who cast a valid vote, and there are no other reasonable grounds to believe that the employees did not agree to the termination; and

•it is appropriate to approve the termination taking into account the views of any employee organisations covered by the enterprise agreement.

If the FWC approves the termination of an enterprise agreement, the termination operates from the day specified in the FWC's decision to approve the termination.

Notice of termination at common law is subject to the effect of any applicable statutory provision, or industrial instrument, the parties to a contract of employment can agree that the contract is to be terminable by the giving of whatever period of notice they wish.

For executive employees such periods commonly range from 3 to 12 months. Notice entitlements for non-executive employees are normally between 1 to 4 weeks — sometimes on a sliding scale calculated by reference to the statutory standard that is discussed below.

A true fixed-term contract is one which is stated to run for a specified period (eg four years) or until the occurrence of a specified event (such as completion of a construction project), and which makes no provision for termination prior to expiry by effluxion of time or the occurrence of the specified event.

Contracts which are expressed to run for a specified period or until the occurrence of a specified event, but which also make provision for termination by notice during their term, are referred to as ‘maximum term’ contracts. Like true fixed-term contracts, such contracts will automatically terminate upon the occurrence of the specified event, but can also be terminated during their nominal life by the giving of the appropriate amount of notice.

Like all other contracts of employment, both true fixed-term and maximum-term contracts can be terminated in the face of repudiatory breach by the other party.

Many contracts contain provision for termination by reciprocal notice — eg by stipulating that the contract is terminable "by either party giving 3 months’ notice". Sometimes, contracts may provide for a shorter period of notice for the employee — presumably in recognition of the fact that it can be counter-productive to keep an employee locked into a contract once they have decided to move on and/or that it will often be easier for the employer to find a replacement employee than for the employee to find alternative employment.

It is common for contracts of employment to include a probationary period during which the employer may dismiss the employee with a lesser period of notice than once the employee passes probation. However, the notice provided must be at least equal the minimum periods set out in the NES (one week’s notice for employees with less than 12 months’ service – see below) or an applicable modern award or enterprise agreement, whichever contains the more generous entitlement.

Termination of employment without notice (or payment in lieu of notice) may be permitted in limited circumstances. Particular events may be prescribed in the contract (usually serious misconduct and/or a breach of an essential term of the contract) as giving either party a contractual right to bring the relationship to an immediate end.

At common law, dismissal without notice (summary dismissal) on the basis of serious misconduct is justified where an employee’s conduct involves a repudiation of the essential obligations under the contract or it is repugnant to the employment relationship: Willis Australia Group Services Pty Ltd v Mitchell-Innes. See Summary dismissal and Repudiation.

An employee will be excused of its obligation to provide notice where the employer repudiates the contract. This includes circumstances where an employer forces the employee to resign (constructive dismissal).

Termination without notice in the absence of justification will constitute wrongful termination at common law. Where the employee is the aggrieved party, the employee will be entitled to recover all the remuneration that he or she would have received during the notice period, had it been properly given.

It is exceedingly rare for an employer to bring proceedings in relation to an employee’s failure to give notice, other than in circumstances where the employee has resigned to take up a role with a competitor. Where this happens, the employer would be more likely to seek an injunction to restrain the employee from working for the competitor, as opposed to damages. See Restraint/confidentiality clauses: enforceability/severability, etc. Some industrial instruments may also allow the employer to withhold monies on termination if the employer resigns without giving the requisite notice.

Before summarily terminating a contract of employment, an employer should be mindful of the unfair dismissal provisions under the FW Act which require that a termination is not harsh, unjust or unreasonable. There have been many instances where the FWC has found that although the employee’s conduct justified dismissal for the purposes of the FW Act, summary dismissal was a disproportionate sanction, ie Treen v Adelaide Services Alliance T/A Allwater JV.

If you would like to discuss this matter further by telephone, I welcome you to request those services.

If you have any further questions, I would be pleased to answer those for you.

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The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).